Survey Says Carriers Hesitant to Invest in Equipment
CHATTANOOGA, TN. — Still hesitant on refreshing your fleet? According to Transport Capital Partners’ (TCP) Fourth Quarter 2012 Business Expectations Survey, you're not alone.
Results from the survey showed that carriers will be "very conservative" in replacing equipment over the next 12 months.
There was, however, an increase in carriers planning to aquire 11-25 percent of their tractor fleets (that's in line with a four-year trade cycle, TCP noted), 60 percent of smaller carriers and 45 percent of larger carriers said they were going to replace no more than 10 percent of their tractor fleets.
"In essence," said TCP, "smaller carriers will be relying on older equipment, which has higher maintenance costs and is more prone to poor CSA road inspections."
Sixty-percent of smaller carriers and 43 percent of larger carriers said they don't plan to add capacity in 2013, which, TCP said, reflects the apprehension apparent in rate and volume expectations. That's also the highest percentage since the question was first included on the survey in August 2010.
“Capacity additions have been constrained for some time and linked to shippers’ desire to add dedicated capacity to assure service. Overwhelming new orders have been for replacements, particularly with increased maintenance costs and breakdowns experienced with post-2007 EPA engines by carriers,” commented Richard Mikes, TCP Partner.
A small majority of the larger carriers (51 percent) reported getting enough returns to justify reinvesting in equipment, compared with 40 percent of smaller carriers.
“Well-managed carriers with adequate profit margins will continue to grow and gain market share,” advised Steven Dutro, TCP Partner. “Carriers with declining profits and aging fleets should consider if, and when, they should reinvest in their business, or if the time has come for an exit.”